US job openings hit 10.1 million and labor market still strong despite Fed efforts to cool economy

2023-05-31 22:55

U.S. job openings rose unexpectedly in April a sign the American labor market remians surprisingly resilient as the Federal Reserve pushes interest rates higher to combat inflation

WASHINGTON (AP) — U.S. job openings rose unexpectedly in April, illustrating the resilience of the American labor market and complicating Federal Reserve efforts to fight inflation.

Employers posted 10.1 million job openings last month, up from 9.7 million in March and the most since January, the Labor Department said Wednesday. Economists had expected vacancies to slip below 9.5 million.

"Demand for workers is still strong and the labor market is largely continuing to chug along nicely,'' said Nick Bunker, research director at the Indeed Hiring Lab.

Layoffs fell, but the number of people quitting their jobs — a sign of confidence that they can find better pay or working conditions elsewhere — slid last month to the lowest level since March 2021, according to the Labor Department's monthly Job Openings and Labor Turnover Survey. Quits remain well above pre-pandemic levels.

The Fed has raised its benchmark interest rate 10 times in the last 14 months, making it more expensive for businesses to borrow and invest. The central bank is hoping achieve a so-called soft landing — raising rates enough to slow hiring, economic growth and price increases without tipping the world's biggest economy into recession.

Economists are skeptical and many expect a recession to start later this year. Fed Chair Jerome Powell was hoping to see the job market cool — and relieve pressure on companies to raise wages and prices — relatively painlessly with employers trimming job openings rather than laying off workers; Wednesday's report was a setback for that scenario.

Still, Indeed's Bunker said the Fed "will be cheered'' by the drop in quits.

Inflation has come down steadily from the four-decade highs it reached in mid-2022. But consumer prices still rose 4.9% in April from a year earlier — well above the Fed's 2% year-over-year target.

Hiring has slowed after posting the best two years on record in 2021 and 2022. Employers added 666,000 jobs from February through April — decent numbers by traditional standards but still the weakest three months of job creation since January 2021.

But surprisingly resilient consumer spending and a wave of retirements since COVID-19 hit the economy in early 2020 have kept the labor market tight. The unemployment rate fell to 3.4% in April, tying a 54-year low.

The Labor Department issues job figures for May on Friday. Forecasters surveyed by the data firm FactSet expect that the economy generated 188,000 new jobs this month (down from 253,000 in April) and that the unemployment rate blipped up to 3.5%.